Correctly pricing your Mueller home for a sale can make the difference between a miserable selling experience and a fulfilling one. Over-priced homes spend longer on the market which often results in a lower sales price than a correctly priced home. Under-priced homes limit the ultimate amount a buyer will pay, even in a sellers’ market.
While there are different pricing and negotiating strategies, if you don’t go into the home selling process with a realistic sales price in mind, you could be making a mistake that will cost you dearly in financial terms and in stress levels. Just as 80% of drivers think that they have better than average driving skill, often we see home sellers over-estimating the value of their home. It’s always nice when it’s the other way around though – getting to tell a seller that their home is worth more than they thought.
Using the wrong comparable sales
Comparing your home to other home sales forms the basis of a comparable market value, and the biggest mistakes we see are in selecting homes that aren’t truly comparable.
Mueller housing types
Since homes at Mueller span the genres, sellers and agents that aren’t familiar with the differences may compare housing types that are quite distinct and have different pricing models.
At a cursory glance in a database, garden homes and yard homes all look like detached homes. They are very different though – a typical garden home being on a much more compact lot, and often built to a zero lot line – windows on only one side of the home. That’s pretty significant when it comes to home values.
Homes of different sizes
People get hung up on “price per square foot” of recent sales. A very small single story home on a small lot will have a disproportionately higher price per square foot compared to a much larger two story home on a similar lot. Price per square foot is a guide at best, and is only comparable between homes of different sizes.
Ignoring the lot
Homes at Mueller are more densely built than in other areas of Austin, so very few lots are easily described as “large”. That said, there is a large difference in relative lot size, even between homes of the same type. Corner lots, large and irregular lots and lots in premium locations opposite parks and pools all weigh in on the price of a home.
Incorrectly factoring in time
Markets change over time, and if you’re comparing home sales from too long ago in a rising market, you might be drastically under valuing your home. Likewise, in the falling market in which the Mueller development was born, prices were lowering and some builder inventory was very high which meant resale pricing was having to adjust downwards to keep in the market.
Comparing New with Old
While Mueller is still being built out, the builders have a large impact on resale home pricing. There are pros and cons of a new versus resale home for any given buyer situation, but in terms of pricing, new homes are just different.
When it comes to selecting comparable sales, new homes that can still be customized have to be treated differently to new homes that are built and ready to move into.
For example if we look at houses for sale in 2017 between 2,000 and 2,300 square feet we’d see a price range of $535,000 to $600,000 ignoring out-liers. New homes in the same size bracket sold for $624,000 to $634,000. You have to compare apples with apples and also consider what is going to be more appealing to a buyer.
Ignoring the Competition
At Mueller there is often competition from new builds and the timing of the latest builder sales release will impact a buyer’s price perception. There’s also the resale market and any competing homes to consider. The more knowledge on current and upcoming comparable listings you have, the better you are able to select a pricing strategy that makes your home competitive.
Comparing list price and not sales price
As mentioned before there are different sales price selection strategies used by different sellers and agents. If you’re looking at list prices for comparable sales and not looking at actual sales price, you’re barking up the wrong tree.
For example, consider a new build in the MLS – some buyers will spend up to 10% over the list price to customize the home (and sometimes builders will leave out certain things that most buyers will consider essential to be able to profit at the design center).
Incorrectly valuing features
There’s a difference between the cost of an upgrade at the new build design center and its value to the resale price. Going for a “level 7 carpet” might not give you “level 7 returns”, especially if most buyers are looking for hard surface flooring. Likewise, the value of solar PV panels are often incorrectly accounted for in a price analysis.
How To Price Your Mueller Home
If possible, we advocate using an agent who understands the neighborhood – with the history and different housing styles and builders, pricing at Mueller isn’t as simple as it can be in more homogeneous suburban markets.
If you are looking to get the most from a home sale at Mueller, get in touch and we’ll give you the benefit of our neighborhood experience and help you understand the real value of your home. Sherlock Homes Austin – serving Mueller since 2007.